For the Following Transaction,identify the Type of Change That Would

question 18

Multiple Choice

For the following transaction,identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Issued Capital + Opening retained profits + Revenue - Expenses - Dividends
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At the end of the accounting period,3 months' interest is owing to the company from the bank on a term deposit with the bank.

• A) A liability increases and another liability decreases.
• B) An asset decreases and a liability decreases.
• C) An asset increases and revenue increases.
• D) An asset increases and another asset decreases.

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Definitions:

Adequacy Of Consideration

The sufficiency of what is exchanged in a contract to make the agreement enforceable, ensuring each party receives something of value.

Bankruptcy

A legal procedure for dealing with debt problems of individuals and businesses; officially declared inability to pay outstanding debts.

Promissory Estoppel

A legal principle that prevents a promisor from denying a promise when the promisee relies on it to their detriment.

Consideration

A fundamental concept in contract law that refers to something of value (such as money, a promise, or an act) exchanged between parties as part of a contract.